Draft Statutory Auditors, Third Country Auditors and International Accounting Standards (Amendment) (EU Exit) Regulations 2019

Debate between Peter Grant and Kelly Tolhurst

Monday 9th September 2019 General Committees

[Kelly Tolhurst]

I thank the hon. Member for Sefton Central for his comments, but I must pick him up on one point. He questioned whether the Government respect democracy. We have sat across from each other numerous times in Committees this year, and I point out to him that respecting democracy is exactly what we are doing. The regulations ensure we are fit and ready for when we exit the European Union. That is respecting democracy and the 2016 democratic vote. I need to point that out, and it is exactly why my Department has been doing the work that is required for us to ensure that we are fit and ready to leave with or without a deal.

I remind the Committee that the regulations are part of what will enable us to ensure that the EU retained law that comes into UK law is fit and proper for when we leave the European Union. We are ensuring that we can communicate that to business, and that the current laws will continue to operate correctly in the UK. As the hon. Member for Glenrothes pointed out, the limitations in the withdrawal agreement set out what the Government can do when bringing secondary legislation through the House. He will note that the only change in the regulations is to ensure the smooth and effective running of regulatory systems when we leave.

Members also commented on the quality of audit and on their concerns about the performance of some UK companies. As the hon. Member for Sefton Central will know, we had the Sir John Kingman review of the Financial Reporting Council, and the Government are working through that and consulting where possible to make modifications and changes within the FRC. That ongoing piece of work by Government is not necessarily completely related to these regulations.

The hon. Gentleman will know that the IFRS is a high-quality, internationally accepted and supported set of financial reporting standards that is regarded as a benchmark throughout the world by listed companies.

[Peter Grant]

The Minister seems, rightly, to be recognising the importance of that organisation of experts. Why will the Government not listen to other organisations of experts in their consideration of the Brexit proposals?

[Kelly Tolhurst]

I am here to speak to the regulations that are in front of us. I assure the hon. Gentleman that the experts in the Department for Business, Energy and Industrial Strategy, as well as our stakeholders and partners across the sectors, have been spoken to. I challenge him to name the organisations that I have ignored or chosen not to speak to.

[Peter Grant]

The Minister will be aware that there are six recognised chartered accounting bodies in the United Kingdom. Can she name the ones that were consulted over these regulations, or is she saying that those organisations are not experts?

[Kelly Tolhurst]

As part of our ongoing engagement with stakeholders across all the Department’s responsibilities, we have regular dialogue with those organisations, whether it be on this statutory instrument or on any of the Department’s other business.